Architecture
Last updated
Last updated
The iBTC architecture bridges Bitcoin with other chains securely and efficiently, offering a transparent and verifiable process that eliminates intermediaries from the cross-chain bridging equation.
The iBTC system can mint to various blockchains, and will be represented by the name "destination chain" during the following overview.
Vault Creation on Destination Chain: A merchant initiates the process by creating a vault object on the destination chain (Ethereum, Arb, XRPL, etc.) and receives a unique ID (UUID) for this vault.
Sign and Submit BTC Deposit Transaction: The merchant connects to the iBTC dApp (or other similar system) to build a signed Bitcoin PSBT (Partially Signed Bitcoin Transaction, a transaction that is not yet signed and broadcast to the network) to lock BTC into the network. The Bitcoin is locked into a 2-of-2 multisig between 1. the merchant and 2. a threshold of iBTC Attestor nodes. The Bitcoin transaction commits to the unique vault ID (Vault UUID) to ensure it can't be used to fund any other vault. The PSBT is sent to one of the iBTC Attestor nodes for processing.
Attestor Network Validates the Tx: Attestors share the transaction among their peers, each independently verifying the transaction, ensuring its correctness and the amount. A. If the vault is new or empty, attestors broadcast the transaction. B. If the vault already holds Bitcoin collateral, meaning this transaction is for depositing additional Bitcoin, the merchant's PSBT should send some additional funds into a new 2-of-2 multisig, and the Attestors use a threshold signature flow (FROST) to spend the old vault collateral into the new transaction, which is then broadcast. Each vault is represented by exactly one Bitcoin transaction at any given time.
ERC20 Token Issuance on Destination Chain: Once enough Bitcoin confirmations are confirmed, Attestors perform another threshold signing flow to issue iBTC tokens on the destination chain. With sufficient attestor agreement, they sign a transaction minting the iBTC token on the destination chain, directly owned by the merchant.
Token Redemption: To redeem Bitcoin, the user initiates the burn process, returning iBTC to the source contract, where it is burned.
The Execution Phase: The merchant signs a PSBT to send some or all Bitcoin from the vault transaction back to their wallet, with any remainder sent to a new vault transaction. This PSBT is sent to one of the Attestor nodes, where it is shared with its peers for confirmation. Attestors verify and sign this transaction, broadcasting it, and the Bitcoin is returned to the merchant's wallet.